The Telecommunications Business Act B.E. 2544 (2001) (“TBA”) provides that a person operating a telecommunications service in Thailand is required to obtain a license. “Telecommunications Service” is defined under the Act on the Organization to Assign Radio Frequency and to Regulate Broadcasting and Telecommunications Services B.E. 2553 (2010) as:

“A service which provides the emission, transmission or reception of signs, signals, writing, digits, images, sounds, codes, or intelligence of any nature by means of Hertzian, wire, optical, electromagnetic, or any other system, or a combination thereof, and shall include satellite communication services or other business prescribed as telecommunications services by the NBTC, but not including sound broadcasting, television broadcasting, and radio communication services”.

A person is considered operating a “Telecommunications Business” if the nature of the business is to supply Telecommunications Services to other persons. Although the definitions are closely related, “Telecommunications Business” has a broader meaning than Telecommunications Service. The regulator must look into the “nature” of the business to determine if it is a Telecommunications Service. If the business is deemed a Telecommunications Business, a license is required from the National Broadcasting & Telecommunications Commission (“NBTC”).

The NBTC’s Notification Re: Telecom Network Access and Interconnection B.E. 2556 (2013) (the “Notification”) imposes duties on licensees who own telecommunications networks, such as allowing other licensees to interconnect with their network on a fair, reasonable, and non-discriminatory basis. Licensees with a network shall submit a Reference Interconnection Offer (RIO) along with relevant supporting documentation that shows the principle and method for calculating interconnection charges to the NBTC for its review. The Notification also provides guidelines for the contractual arrangement and dispute resolution procedures in case of refusal of network access or interconnection.

Telecommunications Network” means the set of telecommunications equipment that is directly connected or connected through switching equipment or any other equipment for telecommunications between defined termination points using any wire, radio-frequency spectrum, optical, or any other electromagnetic system or combination thereof.

According to the TBA, three types of telecommunications licenses are issued to Thailand operators: Type I, Type II, and Type III. Each license has different requirements, rules, and obligations that reflect the status of the operator. Each type of telecommunications license is further subdivided into either a license to operate a telecommunications service or a license to operate an internet service. The criteria and requirements, however, are the same for both. Therefore, the details below also apply to both types of service.

Type I licenses are for telecommunications operators who do not own a Telecommunications Network and whose business does not impact fair competition. When applying for a Type I license, the critical element is that the operator will not own network equipment as a Type I is reselling the network of Type II or Type III, operators. Further, a Type I operator cannot control or operate a Telecommunications Network.

The TBA does not impose foreign shareholding restrictions on Type I licensed operators; however, foreign nationals or companies with a majority of foreign shareholders are subject to general laws on foreign business and must obtain a Foreign Business License from the Ministry of Commerce to operate their business. Therefore, it is standard practice for a Type I applicant to apply to the NBTC before applying with the Ministry of Commerce, the issuing agency for a Foreign Business License. The reason being the Ministry of Commerce will want evidence that the application has the necessary Type I to operate its proposed Telecommunications Business under a Foreign Business License.

Type II licenses are granted to operators who, either with or without a Telecommunications Network, provide services (or who lease out their network to operators who provide services) to a limited group of people, or services that cause no significant impact on fair competition, the public interest, or consumers. This type of license is typically issued to operators who provide services exclusively to large organizations whose business operations are spread across a wide geographic area. Type II licensed applicants must fulfil all criteria as prescribed by the NBTC before applying. For example, a call-back/call re-origination service is one example of a Type II licensed business. In addition, the TBA prescribes that Type II licensed operators must be Thai or a company in which Thai nationals hold more than 50% of the total issued shares.

Type III licenses are granted to operators who possess Telecommunications Networks or provide services to the general public or services that cause a significant impact on fair competition, the public interest, or require special consumer protection by the authorities. Telecommunications Services that fall under a Type III license include public switched telecommunications services, integrated services digital networks, public cellular mobile telephone networks, and public mobile data services. The TBA prescribes that Type III licensed operators must be Thai or a company where Thai shareholders hold more than 50% of the total issued shares.

Only operators who obtain a Type III license may operate a Telecommunications Network to provide international private leased circuit (IPLC) or international internet gateway services. In this regard, the Type III licensed operator must also obtain an additional IPLC or IIG license (as the case may be).

Although a Type I licensed operator cannot by itself operate the IPLC or IIG service, it may purchase these services from an IPLC/IIG licensed operator and resell the same to its customers under its name.

Each type of license is subject to different regulations and controls over business operations, from license acquisition to operator conduct. Such varying regulations recognize the fact that different licensees possess different types of networks and equipment. Trade competition also plays a factor in the level of oversight of an operator by the regulator.

In summary, the TBA differentiates Telecommunications Business operators by network possession, the purpose of services, and impact on consumers. Furthermore, to help stabilize the various Telecommunications Services offered by operators, the regulator imposes different obligations on Telecommunications Business licensees to facilitate network access and encourage freer and fairer competition in the Thai telecoms sector.

Contact Mr John P. Formichella at: john@fosrlaw.com

Also, visit John’s blog here: johnformichellalegalbits.blogspot.com

© John P. Formichella

Posted by John P. Formichella

John Formichella, along with Numlapyos Sritawat and Naytiwut Jamallsawat, founded Formichella & Sritawat and leads the firm’s Telecommunication, Media, Technology, Data Privacy Practice and is past Chair of the Information and Communications Technology Committee of the American Chamber of Commerce in Bangkok. He is rated as Leading Individual by Legal 500 and ranked as a Band 1 individual by Chambers and Partners. Considered a leading expert in the technology, media, and telecommunications sector, John has over 25 years’ sophisticated experience, covering technology transactions, telecommunications law, data privacy, cyber-security, data center outsourcing, media (OTT service providers, film, and television), and e-commerce. John has also served as an advisor to local chambers of commerce and U.S. Embassies in Thailand and Taiwan, and governmental bodies regarding Technology, Media & Telecommunications matters, including both the Office of the United States Trade Representative and United States Department of State in connection with international trade and telecommunications, and has provided testimony to members of the United States Senate on fact-finding missions in Thailand. Before forming Formichella & Sritawat, John practised with Bangkok based firm Blumenthal, Richter & Sumet for 16-years. He came to BRS from Minter Ellison, where he practised out of its Bangkok offices in its Corporate practice group. Before joining Minter Ellison, he was Vice President/General Counsel of Wherever.net Holding Corporation (a NASDAQ-listed telecoms company based in Hong Kong). Before that, he was an associate for East-West International Law Offices in Taipei, Taiwan, from 1996 to 1999. John graduated from the State University of New York (University at Buffalo), earning Bachelor of Arts and Master of Arts (Economics) degrees and a Juris Doctorate. He also studied at the Chulalongkorn University Faculty of Law in Bangkok. John is admitted to practice law in Washington, D.C. and is a District of Columbia Bar Association member. John can be reached at john@fosrlaw.com

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